BHP Billiton launched a hostile $147.4 billion bid for rival miner Rio Tinto, setting the stage for the world’s second-largest takeover. BHP hopes to sell Rio shareholders its idea of assembling a super miner but runs the risk of igniting a bidding war with Rio’s largest shareholder, state-run aluminum group Aluminum Corp. of China (Chinalco). Big customers for both companies, particularly steel mills in China and Japan that buy hundreds of millions of tons of iron ore each year, have raised concerns about the power a merged group would have on pricing of raw materials.

Last week, Chinalco teamed up with Alcoa to buy $14 billion worth of Rio Tinto stock, giving it over 9% of the company. Chinalco and Alcoa have reserved the right to make an offer for Rio Tinto, which paid $38 billion for Canada’s Alcan last November, if there was another bid.